The Behavior of Credit-Rating Agencies During the Recent Global Financial Crisis

15 Pages Posted: 12 Aug 2019

See all articles by Joel Spina

Joel Spina

Collin College; Montereale Consulting; Federal Reserve Bank of Dallas

Date Written: August 7, 2019


Referring to the role credit-rating agencies played in the most recent global financial crisis, the Financial Crisis Inquiry Commission – FCIC concluded that “… the failures of credit rating agencies were essential cogs in the wheel of financial destruction.” The reasons for such failures include changes in technology, the rapid transformation of market structure, volume of business and complexity of financial instruments to be rated by these entities. These changes started in the late 1990s and culminated in the 2000 – 2007 period, but the consequences of such failures have pervaded global markets until recently. In addition to describing trends and circumstances surrounding these agencies during the global financial crisis, this study analyzes behavioral themes that intervened in the events and influenced the development of undesirable outcomes to the agencies and their clients.

Keywords: credit-rating agencies, financial crisis, reputation, and information asymmetry

JEL Classification: E00, E02, E03, G24, G32

Suggested Citation

Spina, Joel, The Behavior of Credit-Rating Agencies During the Recent Global Financial Crisis (August 7, 2019). Available at SSRN: or

Joel Spina (Contact Author)

Collin College ( email )

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Montereale Consulting ( email )

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Federal Reserve Bank of Dallas ( email )

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